Study Finds Car Repairs Cost More For Asian Imports

Average repair costs are nearly $70 higher for vehicles manufactured in Asia, but it should not impact insurance claims severity trends, according to a study by an auto insurers' data and software provider.

While average repair cost and total loss value are both higher for the imports, "the fact that more Asian nameplate vehicles are repaired keeps the overall average repair costs roughly equal to the domestic nameplate overall severity, wrote Greg Horn.

Mr. Horn is the vice president of San Diego-based Mitchell International, which in addition to selling data and software to auto insurers also provides e-business solutions--not only to carriers, but for the collision repair, medical claims and glass replacement industries as well.

The Mitchell report noted that in July 2006, Toyota overtook Ford as the nation's second largest seller of vehicles--for the first time ever.

The report found that the emergence of an American automotive marketplace dominated by Asian-made cars and trucks will impact the claims process and component costs significantly, but may not produce much change in average overall claims costs.

Mitchell said industry data indicates that vehicles manufactured in Asia tend to cost more to repair than American-made cars and trucks (about $67 more on average in late 2006), although historical comparisons demonstrate this difference has been narrowing over time.

Further, labor--not parts--drives these higher overall costs for Asian-manufactured autos.

But the fact that Asian vehicles are more likely to be repaired than declared a total loss helps to balance the overall repairable and nonrepairable average severity roughly equal.